abg shipyard fraud: CBI: ABG siphoned off borrowed funds on ex-chairman’s order

The Central Bureau of Investigation (CBI) on Thursday told a local court that ABG Shipyard and group companies siphoned off “huge amounts of borrowed funds” on the direction of its former chairman Rishi Agarwal, and sought seven days of custodial interrogation of him.

The agency alleged that a large part of the borrowed money “has been moved out of India in violations of the sanctioned terms and conditions of the banks” and used “to acquire assets which are being utilized” by Agarwal – who was arrested by CBI on Wednesday in connection with an alleged ₹22,842-crore bank fraud case – through group entities.

The court remanded Agarwal to four days of custodial interrogation.

“The magnitude of the amount involved in the matter and the extent of investigation itself reflects the gravity of the offense,” it said in its order. “Thus, the court cannot divest the investigating officer the opportunity for comprehensive and sustained interrogation of the accused.”

CBI in its remand paper alleged that when confronted, Agarwal claimed that the funds were for “official use for staff” of ABG Shipyard. “However, he has failed to identify or provide details of those officials,” it alleged.

ET has seen a copy of CBI’s remand paper.

Surat-based ABG Shipyard is accused of duping a consortium of 28 banks to the tune of ₹22,842 crore in what could be the country’s biggest bank fraud yet.

In a related development, the Enforcement Directorate (ED) has attached assets worth ₹2,747.69 crore in connection with its money laundering case against ABG Shipyard. The attached assets include shipyards in Surat and Dahej, agricultural lands and plots, various commercial and residential premises in Gujarat and Maharashtra, and bank accounts of ABG Shipyard, its group companies and other related entities.

CBI in its remand paper alleged, “The investigation has revealed that huge amounts of bank funds have been diverted by borrower M/s ABG Shipyard Ltd and its group companies under the direction of Rishi Agarwal and a large part of it has been moved out of India in violations of the sanctioned terms and conditions of the banks. However, he has not revealed the conspiracy and real motive behind it.”

The agency said it apprehends that Agarwal “may threaten and influence the key witnesses…and force them not to give evidence against him”.


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